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Wednesday, 12 August 2009
Page: 18


Mrs MARKUS (10:03 AM) —I rise to speak on the Veterans’ Affairs Legislation Amendment (Budget Measures) Bill 2009. This bill has three measures that will affect the veteran community. The first is a change to the way Veterans’ Affairs payments are paid to veterans and their dependants who live permanently overseas. This measure will be welcomed by those recipients and other members of the ex-service community. It means receiving the payment will become more convenient and the cost will be lower. Under existing arrangements, persons residing permanently outside Australia who are in receipt of pensions and other payments under the Veterans’ Entitlements Act or the Military Rehabilitation and Compensation Act are required to have an account in Australia with a bank or financial institution into which Veterans’ Affairs payments can be made. Having an Australian bank account incurs bank fees and higher transfer costs as money is deposited into the account in Australia and then transferred internationally. Such an arrangement puts Veterans’ Affairs payment recipients at a disadvantage in comparison with other Commonwealth beneficiaries—for example, Centrelink recipients who receive their pension directly into an overseas bank account. Changing the arrangements will align the Department of Veterans’ Affairs policy of payment to overseas bank accounts with other Commonwealth agencies, including Centrelink and the Child Support Agency.

As shadow minister for veterans’ affairs, I have taken the opportunity to consult with many ex-service organisations representing veterans. The need to change the way overseas pensions were paid was being raised with me by key organisations in the veteran community, including Legacy, the RSL and the War Widows Guild of Australia. I support this measure as it responds to an issue of concern to the veteran community and the change will benefit veterans and their dependants.

The second measure is to extend access to the Defence Service Homes Insurance Scheme to serving and former members and reservists who are eligible to apply under the Defence Service Homes Insurance Scheme. An estimated 7,500 Australian Defence Force personnel and reservists will now gain access to defence service homes insurance for building and contents insurance products. Extending access to a broader section of the Defence Force reservists is a good move and will result in a net saving of $1 million over a period of four years. The savings will be created due to the difference in the premiums received and claims made during that period. I understand the reasoning behind the measure is to encourage retention in the Defence Force and reserves. An additional benefit is the savings of approximately $1 million over four years. This will add value to the budget over coming years and will provide a benefit to our men and women in the Defence Force.

I turn now to the third and final measure. The veteran community, because of the special and unique nature of this service, have a range of benefits and payment entitlements that in some way say thankyou for the sacrifices and contributions they have made in the service of this nation. Those benefits and entitlements, including income support, pension payments, allowances and a range of programs, provide for the financial, social and physical wellbeing of the veteran community and their families.

The third measure in this bill proposes to cease the payment of dependants’ pension. Dependants—children and spouses—were eligible under the Repatriation Act for a dependant’s pension. The rate of payment depends on the rate of pension paid to the veteran or member, and that is 10 per cent of the amount of pension paid. Payments made under this scheme were additional payments to a person on disability pension for a partner or spouse and also for dependent children. The dependants’ pension has had no new recipients since 1985, no rate increases for children since 1952 and no rate increases for partners since 1964. The only exception was in July 2000, when a one-off increase was made to compensate for the impact of the GST. The maximum payment is $8.42 per fortnight for partners and widows and $2.86 per fortnight for children. Minimum payments can be as little as 84c per fortnight for partners and widows and 29c for children.

The bill proposes to cease the person’s entitlement and close for good the dependants’ pension. To compensate recipients for this unexpected change, a lump sum one-off payment equal to three years of the amount of the fortnightly payment is proposed to be made as recompense for the closure of the pension. The change is proposed to come into effect on 22 September 2009, with payment of the lump sum to be made on 24 September 2009. The lump sum payment will be exempt from income tax. I also understand that people without adequate means of support on this pension will be excluded from this measure. Without adequate means of support, pensions will continue to be payable to entitled persons under section 4 of the Veterans’ Entitlements (Transitional Provisions and Consequential Amendments) Act 1986. The one-off payment will be equivalent to three years worth of pension—that is, 78 fortnights.

Not having the benefit of the department’s calculations, it is not possible to estimate the amount of the lump sum payment that each recipient will receive. In Senate estimates we were advised that 26,089 people were receiving this payment and that it cost $1.7 million per year. The department claims on page 16 of the portfolio budget statement that this allowance is:

administratively expensive in proportion to the benefits it provides—

and will—

free up resources that can be better targeted with other programs.

In essence, what the department is saying is that this measure is a housekeeping one where the spending is more than the payment cost—a reasonable proposition. But any consideration of terminating a benefit or payment entitlement to a veteran and their family deserves the closest possible scrutiny. The decision to cease a benefit or entitlement is significant and there are a number of questions that need to be answered. We do not really know, because it has been difficult to obtain information about those people, who will be impacted by the termination of the dependant pension under this bill. Those people deserve to have some questions answered.

At Senate estimates we asked for a breakdown of the age groups of people receiving this payment. Again, we were told there were 26,089 adults and 45 children. We asked the age of the oldest recipient; the department would not hazard a guess. We asked the age of the youngest recipient and the department said that they do not have an age break-up of the individuals. Given that the last approved recipient was in 1985 and it has been 24 years since then, who and how old are the 45 children? Then, if you look at that person’s entitlement over their lifetime, the lump sum looks, and may be, small indeed.

The budget papers say the cost of paying out this pension in the first year will be $5.3 million. We do not know the ages of the people on the scheme, and this is of concern to me. The forgone benefit of someone who has perhaps many years of benefit ahead may be much more than the payout amount. I would not want to think that any partner or dependant was going to be disadvantaged. By the same token, I would not want to stand in the way of savings if savings can be made without making people worse off.

My question to the minister is in relation to the recipients who may still be relatively young and, as a consequence, then miss out on the benefit of future payments. Will the three-year lump sum be adequate to compensate those recipients? How was the three-year time frame chosen? Was it based on factual data regarding the age of the recipients or was it an arbitrary figure picked out of a hat? How will the intention of the Rudd Labor government be communicated to the current recipients? What will their reaction to the termination of their payment be? How will you ensure these people are not disadvantaged? Without having these questions answered, we do not know the full impact that this budget savings measure and loss of entitlement may have on the veteran community. However, the urgency of this bill to ensure prompt payment to the recipients leaves me able only to assume that the minister has the answers and that he is confident that the one-off payment will be adequate. I hope that this modelling is sound and will be holding him to account.

Since becoming shadow minister for veterans’ affairs I have advocated against the erosion of entitlements. I stood up for the partners of veterans when the government stopped the partner service pension for partners separated for 12 months or more who were not separated due to illness and had not formed a new relationship. The Labor government’s reckless spending has now resulted in another savings measure being introduced that may impact on veterans’ families. Labor started with the coalition’s legacy of no net debt and $45 billion in the bank. The budget revealed the high price all Australians will have to pay for Labor’s reckless spending spree over the previous 18 months. On Labor’s own figures it is now taking net debt past $200 billion and gross debt to at least $315 billion. Since November 2007, two-thirds of the debt owed by taxpayers by 2012-13 will be due to new spending decisions taken by the Rudd government over the past 18 months, and this is just the beginning. It will cost every man, woman and child around $9,000 to pay back the debt. This is a debt that will be carried by every Australian and by generations to come. Veterans and their families deserve to be treated with the greatest respect and dignity. It is only proper that Australia provides the entitlements and support that veterans and their families need. The coalition has a sound track record of managing the economy and is committed to responsible economic management.

The Australian people have every right to feel betrayed by a big-spending, reckless Labor government, who were left an outstanding economic legacy courtesy of the coalition. It is distressing indeed to see that in such a short time the surplus has been spent, the future funds have been raided and Labor have racked up a debt and deficit that will take generations to repay.

The budget had very few announcements for the veteran community and the department will continue to look for savings. I have no problem with the first two savings initiatives, as they are what the veteran community have been asking for. The third measure focuses on the termination of an entitlement, and the people who receive the entitlement are entitled to answers. While the coalition will not oppose the legislation and its measures, I strongly urge that answers be provided—particularly for the sake of the 26,089 people who have been receiving this payment.

The termination of the dependants’ pension, which seeks to round off very old payments, when no new grants have been issued since 1985 and where the cost of administering payments is more than the payments themselves, seems reasonable enough. What is of concern are the number of questions unanswered, the lack of information and the potential for people to be disadvantaged. More disturbing is that this could be seen as yet another instance of the Rudd Labor government terminating an entitlement.

It is possible and, indeed, it is right to look for and make savings, but this should not be at the expense of entitlements. My concern as shadow minister is that there is not enough information. We do not know the impact that this will have on the 26,000 plus people receiving this payment. My message to the veteran community is that your concerns are important to the coalition. The coalition is committed to maintaining an economically responsible approach to providing effective support for the needs of veterans, their families and their community. I assure you that the coalition’s focus is on entitlements, compensation and support for the physical, mental and social needs of veterans and their families. We will continue to hold the government to account whenever there is any change to entitlement or action that impacts on the veteran community.